Buying or selling a business can be an exhilarating decision: perhaps you have been inspired to start a new venture or change careers, or, after many years of hard work, you are finally ready to sell your business.
As rewarding as this transaction may be, numerous technical and financial considerations can make the process confusing and overwhelming for the people involved. For example, many business sales are accompanied by a lease. Such situations may require advice from experienced business lawyers.
With a thorough understanding of the processes involved, Gavel & Page business lawyers provide you with clear and meaningful guidance by shining the light on all hidden problems and issues usually left in the dark, so the process is stress-free and your interests are protected.
When purchasing or selling a business, the parties involved will need to discuss, understand and agree on a number of items. Depending on the nature of the business being bought or sold, this could include:
Specific advice for the purchase or sale of a business will depend on your individual circumstances and concerns and the nature of the business in question. According to our business lawyers, some common questions to consider include:
These are just some important factors to take into account when deciding on the manner and structure of purchasing or selling a business. Other preliminary questions and considerations to take into account include:
Owning and operating a business carries with it a number of risks. At Gavel & Page, our business lawyers guide you through the maze of competing thoughts and questions.
A seller may request that a deposit be paid by the purchaser prior to completion of the sale. It usually amounts to about 10% of the purchase price. Depending on agreements between the parties, the deposit may be held in trust until the sale is complete, after which time it is given to the seller.
In some cases, the parties may agree that the seller can use the deposit before completion of the sale. This can be risky, especially if the purchase does not proceed.
The seller will need to determine which specific pieces of equipment and stock will be included in the sale, and the purchaser will need to confirm which items are expected to be included.
The items bundled into a sale could be any number of things, depending on the nature of the business. The sale of a café or restaurant, for example, may include the tables, chairs and ovens, while the sale of a manufacturing plant may include the drill presses and forklifts, and the sale of a grocer may include fresh fruit and canned foods.
It is also customary for the included equipment and stock to be repaired and reconditioned, and generally to be in good working order, prior to completion of the sale. An independent valuer may be asked to determine how much the stock is worth.
The specific items to be included in the sale will need to be laid out in the contract. It is essential to be specific in the legal documentation, so that both parties are clear and certain as to what is being purchased, unifying the numerous branches involved.
Our business lawyers provide you with the guidance necessary in exploring these issues and offer the right advice to ensure that any transaction you are involved in has been considered thoroughly, any risks minimised and interests protected.
Often, but not always, the sale or purchase of a business is accompanied by a lease agreement. That’s because, while the business and its equipment may constitute the relevant sale, the land on which the business runs may still be owned by the landlord.
The landlord may require the purchaser to enter into a lease agreement to operate the business from that location and, if so, may need to obtain advice as to the terms and conditions of the lease.
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